The Buyer Read: Midweek Market Update
- 13 hours ago
- 5 min read
The RBA meets on 5 May. Before that, the March quarter CPI is scheduled to be released on 29 April.
That six-day window between the inflation data and the rate decision is going to dominate financial media for the next three weeks.
Some buyers will use it as a reason to wait. That instinct is understandable. It is also, more often than not, a decision that costs them.
The cash rate is at 4.10% after back-to-back 25 basis-point increases in February and March. All four major banks are forecasting another hike at the May meeting. Westpac has gone further, flagging potential rises in June and August that would push the cash rate to 4.85%.
Commonwealth Bank is describing the May call as a "line ball decision."
The CPI data at the end of the month will matter. But buyers who treat every macro data release as a reason to delay tend to find themselves in the same position three months later, and three months after that.
What mattered this week
The most significant signal this week is not any single data release — it is the convergence of several pressures arriving at once.
The 5 May RBA decision is now less than three weeks away.
The March quarter CPI on 29 April is the last major domestic inflation read before the board meets. If trimmed mean inflation comes in above 3.5%, another hike looks near certain. If it surprises lower, the board may pause.
Both outcomes are plausible.
In the background, US tariff uncertainty continues to weigh on global sentiment and Australian confidence.
The US Supreme Court struck down the broader reciprocal tariffs in February, but a 10% baseline tariff on Australian exports to the US remains in place.
A new round of investigations — focused on manufacturing capacity — is expected to conclude in July, leaving further tariff escalation later in 2026 unruled out.
Australia's direct exposure is limited.
We run a trade deficit with the US, which spared us the worst of the reciprocal tariff regime.
Treasury has assessed the direct GDP impact at around 0.2% in 2026. The bigger risk is indirect: if tariff escalation softens the Chinese economy, that flows through into Australian commodity demand and overall business sentiment.
Consumer confidence is weak.
The ANZ-Roy Morgan index remains near record lows.
House price expectations dropped 10% in April. Sydney and Melbourne are recording monthly price falls.
Mid-sized markets — Perth, Brisbane — are still growing at strong annualised rates.
The Illawarra sits somewhere in between: balanced, active, but not overheated.
What it means for property buyers
Borrowing power has tightened.
Two hikes in two months have compressed serviceability assessments, and another hike in May would compress them further.
Most buyers paying attention already know this.
What is worth understanding is the two-speed character of the current market.
Nationally, the story is softening. In markets where supply is constrained, and lifestyle demand is structural — the Illawarra, parts of the Newcastle corridor, some mid-coastal areas — conditions are holding better than the national picture suggests.
Buyer confidence is the real constraint. Many buyers are psychologically stuck, waiting for rate clarity before committing.
That hesitation is creating conditions where engaged buyers are purchasing well-positioned assets at prices that reflect genuine value rather than auction heat.
Vendors are more negotiable.
Competition is softer than it was twelve months ago.
That window does not stay open indefinitely.
What buyers often get wrong
The most common mistake right now is treating the May rate decision as the gating event for their property search.
Here is the problem: by the time the rate path is clear and confidence returns, you are no longer the only one who knows it.
If the RBA pauses in May — or signals cuts in the second half of the year — borrowing capacity improves,s and buyer competition increases at the same time.
The softness in inquiry that currently exists closes quickly.
The second mistake is reading national headlines as local market conditions.
Sydney and Melbourne are softening. That does not mean every suburb in every market is on the same trajectory.
The Illawarra has different supply dynamics, different buyer profiles, and different price anchors than inner-city Sydney.
A monthly price fall recorded in Sydney is not the same event as a price shift in Thirroul or Shellharbour.
These markets stopped moving in lockstep with Sydney several years ago.
What I'd pay attention to next
The 9 CPI release on 29 April is the single most important data point before 5 May.
Watch the trimmed mean figure — the RBA weights this over headline CPI.
If the trimmed mean prints above 3.5%, expect a hike and firm language in the May statement.
If it comes in around 3.2–3.4%, a pause becomes genuinely possible.
Beyond the rate decision itself, watch what happens to construction costs through Q2.
US tariffs on building materials — steel, aluminium, cabinet and vanity components — are flowing through into supply chains, including here.
New housing supply pipelines remain stretched. That keeps pressure on established stock in undersupplied markets, regardless of where the cash rate settles.
Also worth watching: July 2026, when the US tariff investigations into manufacturing capacity are due to conclude.
Another escalation in the second half of the year would not be a positive for global sentiment.
Our view
The rate environment is uncomfortable, but most buyers have already factored that discomfort into their thinking.
The May decision will give the market a clearer near-term signal — but it is unlikely to change the underlying calculus for buyers who have properly prepared.
Markets like the Illawarra are not immune to rate effects. They are, however, supported by constrained supply, genuine lifestyle demand, and a value proposition relative to Sydney that has held up across multiple rate cycles.
Buyers who are clear on their brief and willing to engage now are operating in conditions that are more favourable than they will be once confidence returns.
Final takeaway
Do not make the 5 May RBA decision the trigger for your property search.
Use the next three weeks to refine your shortlist, understand supply conditions in your target suburbs, and get clear on your actual borrowing position.
The decision on 5 May will not resolve uncertainty — it will just move it to the next question. Buyers who wait for certainty typically find it arriving alongside renewed competition.
If you are thinking about buying in the Illawarra or relocating from Sydney, the current environment rewards engagement rather than observation.
Happy to talk through what that looks like for your situation.
Disclaimer:
This article is general information only. It is not financial, legal, or tax advice, and it does not take into account your personal circumstances or buying goals. You should get independent advice before making any property decision.
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